Philip Davies: Trade, not aid, is way to help tackle poverty

THE amount of money we should be spending on our overseas aid budget has become a highly contentious issue.

On one side of the argument we have the Prime Minister, who promised before the election that we would spend 0.7 per cent of our GNI (Gross National Income) on overseas aid, as did many other countries. He wants to honour this promise because there is such little public trust in politicians.

On the other side of the argument lies virtually every other country in the world and, if the opinion polls are to be believed, the vast majority of the British public who believe that we need to be reducing aid spending in these tough times. This is what has happened to virtually every other Whitehall department since David Cameron became Prime Minister.

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I am very firmly in this latter camp. Whatever the merits of overseas aid, we have not got any money to hand out so liberally. You would not advise people to borrow money to give to charity and yet that is precisely what we are doing.

In the UK, we already spend the highest proportion of GNI on overseas development aid (ODA) among G7 countries. The Department for International Development (DfID) spent £7.7bn in bilateral overseas aid in 2011-12 “supporting” 62 countries. That does not include our contribution on a multilateral level to the IMF, European Bank for Reconstruction and Development (EBRD) or UN agencies and many more. While we are continuing to increase our spending, other countries reduced the proportion that they spent on overseas aid – including those who previously pledged to spend 0.7 per cent of their GNI. They recognise the tough financial times that they face.

It is commendable that the Prime Minister wants to keep his original promise. The problem is that it was a foolish promise to make, given the financial situation of the country.

Making a pledge on the amount of money you will spend on anything is foolish. That is a Socialist approach to the issue – a blind belief that simply the spending of money is the solution to a problem. Surely it is better to focus on outputs rather than inputs? I would much prefer we concentrated on ensuring that the money we allocate to overseas aid (which should be reduced) is spent wisely.

There is a lack of genuine, solid evidence to prove that the gigantic sums we spend actually get people out of poverty. Over recent decades, we have spent £69bn on aid to Africa, and yet the problems are just as entrenched now as they ever were.

At home, the Government rightly wants to end welfare dependency, and yet with overseas aid it entrenches welfare dependency internationally, with many countries simply awaiting their next handout, and that is without the many millions siphoned off by dictators in some nations that are the recipients of our aid.

As we have seen with China and India, it is trade which gets people out of poverty rather than aid which maintains people in poverty. Until recently, we were giving aid to China and we are still giving aid to India – even though they were reported as saying that they didn’t even want it.

Indeed, India is still the second top receiver of the UK’s overseas aid after Ethiopia, and we gave them £300m last year. This is despite the fact that India’s economy grew by almost 10 per cent year on year while we were in recession. At the same time India spends $37.4bn on defence. It also allocated around $1.3bn for its space programme with plans for missions to Mars. We cannot afford to be the world’s backstop, allowing every country to spend our money on anything they want.

If overseas aid was successful, the budget would now be falling rather than going up. We should have an action plan with each country which targets support which gradually weans the country off such dependency. Handing over more and more money each year is a sign of failure, and not success. We have plenty of our own poor people to look after, plenty of other things to fund and a huge national debt to repay. They should all have a higher priority than increasing our budget for overseas aid.